Total back to pre-pandemic profit levels as oil prices rise By Reuters

© Reuters. FILE PHOTO: The logo of French oil giant Total is pictured at a petrol station in Bordeaux


PARIS (Reuters) – French energy group Total SE on Thursday posted first-quarter earnings similar to the levels it was generating before the coronavirus pandemic hit profits, as higher oil and gas prices boosted its trading business and it increased electricity production.

The company, which is increasingly branching into renewable energy and diversifying away from its hydrocarbon-centered activities, profited from this drive as areas like oil refining suffered.

Total reported an adjusted net income of $3 billion for the January to March period, a 69% rise year-on-year, and 9% above first quarter 2019 levels.

This was despite a drop in hydrocarbon production of 7% from a year earlier, to 2.863 million barrels of oil equivalent per day (boepd).

Oil prices plummeted with the start of coronavirus lockdowns early in 2020 that brought travel to a standstill and crushed fuel demand, pushing companies like Total to cut investments and find cost savings.

Recovering prices are now boosting earnings at Total and peers like Britain’s BP (NYSE:), as accelerating COVID-19 vaccination programmes also raise prospects for sustained demand, although lockdowns remain in place in some of Europe.

Total cautioned that the oil environment remained “volatile and dependent on the global demand recovery.”

Like some peers, it is also benefiting from a booming business.

The group, which is set to rebrand itself as TotalEnergies, said it was eyeing $12 billion to $13 billion in investments this year, with half of that going to maintaining activities and the rest for growth, including to further its push into renewable energy.

Total said it expected to generate some $24 billion in debt-adjusted cash flow in 2021, based on hydrocarbon prices remaining at first-quarter levels, with at $60 a barrel, and European refining margins of $10 to $15 per tonne.

The group maintained a stable interim dividend of 0.66 euros per share against first quarter earnings.

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